Basic Pay

Last post December 24, 2019 10:22 AM by debora. 1 repiles.

September 17, 2009 10:12 AM 1
Total Posts: 19
Join Date: September 10, 2009
Rank: Executive
Post Date: December 24, 2019
Posts: 19
Location: India

Basic Pay

Dear All,

I have recently joined a company. Here what I found is that the Basic of all employee is very less, It's not even 10% of the CTC. Can any body help me out about the details how the pay structure should be. As per my knowledge the basic pay should be 50% of the CTC. Is this correct? Can anybody provide me the link or book name which provides me the legal aspect of Basic Pay.

Thanks in advance

Suraj

January 29, 2010 01:242
harishsrinivas
Total Posts: 2
Join Date: September 10, 2009
Rank: Beginner
Post Date: January 29, 2010
Points: 10
Location: India

Re: Basic Pay

No rule or law to fix the Basic to a percentage of CTC usually many companies fix basic between 40 to 60%.  If less salary, for PF, they ensure basic salary more than 6500, HRA vary on the metro 40 to 50%. Conveyance - 800/month.  Medical Reimbursement – 1250/month. Provident fund - (12% of basic salary). ESI – 4.75%.  LTA can be 8.33% or 2months basic.
January 31, 2010 07:303
smkakkad
Total Posts: 2
Join Date: September 10, 2009
Rank: Beginner
Post Date: January 31, 2010
Points: 10
Location: India

Re: Basic Pay

The basic pay is generally kept in the range of 40% to 50% of total CTC however ideally any pay element should not be higher than the basic pay becuase whenever we talk of salary from the statutory point of view basic pay comes first in mind and the other pay elements are generally derived from the basic salary which should not be greater than the original salary amount which is basic pay.
March 9, 2010 12:514
t_sampath
Total Posts: 24
Join Date: September 10, 2009
Rank: Executive
Post Date: March 9, 2010
Points: 120
Location: India

Re: Basic Pay

Hi Srinaren

I just happen to see you posting. In your posting you have mentioned that  "As per the supreme court ruling, even the salary shown as special allowance and food allowance will also attract PF as recently I had a discussion with Regional PF Commissioner"

Can you share the Super Court ruling on this and also throw more light  on this ?

Regards

Sampath

919710928705



March 11, 2010 02:135
humanresource2010
Total Posts: 5
Join Date: September 10, 2009
Rank: Beginner
Post Date: March 11, 2010
Points: 25
Location: India

Re: Basic Pay

Hi Suraj

 

In that context the company may be looking from below mentioned points.

Keeping low Basic (but in concurrence to PF act & Minimum Wage Act) the company might be believing in max take home salary to employee with min ded in terms of PF as all the necessary deductions takes on the basis of Basic salary....

Other context / strategy of organisation (particularly in sales & mktng organisations) they will be they must keeping fixed pay min and variable pay max (which you have to validate thrgh the break up of your total CTC...

this is what i perceive ..

Rgds

 

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